UK inflation-adjusted pay lags France and Germany, OECD says

Bloomberg

The UK was the only European country in the Group of Seven nations where real incomes adjusted for inflation fell in the third quarter of last year, according to the OECD.
Rampant inflation was to blame for continuing slide in household spending power, the Paris-based organization said, piling pressure on Prime Minister Rishi Sunak’s government and the Bank of England to get the cost-of-living crunch under control.
The figures underscore a widening gap between the rich and the poor and help explain why millions of public-sector workers have walked off the job seeking higher pay. Pressure is now on Sunak to settle the strikes by offering raises to workers on the lowest pay including teachers, nurses and ambulance drivers.
Across the 21 nations in the Organization for Economic Cooperation and Development for which there was data, real household income per head grew by 0.2% in the three months ended in September compared with the previous quarter. This was the first rise since the start of 2021, with nine of the countries recording an increase. And while France, Germany and Italy were among the countries where households started feeling more flush, the UK floundered with real income slipping by 0.6%.
It was not alone in the G-7. Canada saw real household income fall by 0.5%, while in the US it remained flat.
But the UK is in a small club of OECD countries where real incomes haven’t yet surpassed pre-pandemic levels. Others in that group include Czech Republic, Denmark, Finland, Portugal and Spain.
The OECD noted that disposable income per head had increased by 9% in the UK in nominal terms between the final quarter of 2019 and the third quarter of 2022, racing ahead of Italy’s 7.9% and only sightly undershooting France’s 9.9%.
But this had been far outpaced by red-hot inflation. During the third quarter of 2022, the cost of living was still increasing.